Cos to live up to their salt with modernisation plan

Kalpesh Damor, TNNJul 25, 2007, 03.55am IST

AHMEDABAD: Is there a way to spice up salt? Yes, by making it cheaper and going for a global sprinkling. A clutch of salt manufacturers from Gujarat's white desert, Kutch, and a few from other parts of the state are powering their way ahead to meet the global challenges.

The companies have embarked on a modernisation drive and are in the process of setting up washing plants equipped with modern technology. The highlight of the exercise being, small investment and big gains.

The companies will infuse Rs 10 crore for setting up the washeries to expect a cost-saving of almost Rs 25 crore, annually. The proposed washing plants by these companies will also improve the quality of salt by removing impurities, which in turn will give a fillip to salt exports from Gujarat, which exports around 2 million tonne of salt every years and accounts for around 90% of the total salt exports from India.

Not only that, out of the total salt production of 18.5 million tonne per annum in the country, around 3.5 million tonne per annum is quality salt and Gujarat contributes around 15 lakh tonnes. Salt companies that have lined up washing plants include Jakhau Salt from Kutch, Chawgle Salt of Jamnagar, Dev Salt of Rajkot, Friends & Friends Salt Works and Nilkanth Salt Works from Gandhidham.

Apart from these players, two to three other manufacturers too are mulling washing plants. Explaining the rationale behind companies going for technologically advanced washing plants, All India Salt Manufacturers' Association (ISMA) president DS Jhala told ET that the move is mainly aimed at becoming globally competitive and increasing salt exports to other countries.

Currently, salt industries in Australia, Mexico and other countries are fully modernised, while India is yet to reach at that level. Modernisation will also help the industry to reduce dependency on labourers as the salt industry is highly labour-intensive and majority of works are carried out manually.

"It becomes very difficult to get labourers during harvesting season as they prefer to work on farms. The new washing plants would also help the industry to tide over the problem of manpower," he said. The new washing plants are likely to bring the salt production cost by 15-20%.

At present, salt production cost is Rs 125-150 per tonne. The industry also has to incur a cost of Rs 200 per tonne to remove impurities from salt. However, the new washing plants would help the reduce the cost and deliver high quality salt. Apart from washing plants, some of the salt companies are also planning to use modern equipments for harvesting of salt, which was earlier done manually.

Mr Jhala added that the industry has also sought extension of lease period for the land given to them for salt production to 20 years from 10 years at present.

It may be mentioned here that salt manufacturers in Gujarat were badly hit by incessant rains at the onset of monsoon this year and to offset the losses the industry had demanded extension in the lease period. "Gujarat industries minister Anil Patel has written a letter to the minister for revenue informing about the demand by the industry.

Extension of lease to 20 years will help the manufacturers to even avail bank loans," he added. He also revealed that the Gujarat share in total salt production in country has declined to 65% this year from 70% in 2005. The total salt production in the country is around 18.5 million tonne, of which Gujarat accounts for 14 million tonne per annum.